Regardless of your age or the number of assets you own, estate planning is a crucial concern. Developing a solid plan will protect the assets you worked so hard for, while also protecting your loved ones after you are gone.
As a result, you must avoid common estate planning mistakes by taking the right steps. Here are a few things to keep in mind as you create a plan.
Forgetting beneficiary designations
In addition to wills and trusts, some assets have beneficiary designations. For example, retirement accounts and life insurance policies allow you to fill in beneficiaries directly on those documents. Designations require updating as your life changes, or the proceeds may go to the wrong person. Keep in mind that beneficiary designations override information contained in your will, so you must update them accordingly.
Neglecting long-term care planning
In the event you are incapacitated by illness or injury, a power of attorney allows another person to make decisions on your behalf. If you do not name a financial or medical power of attorney, the court will choose a person for you. It is best to make the selection on your own, as you must pick a person that has the right qualities to ensure your affairs are properly taken care of.
Not having a backup executor
Choosing an executor is a major decision, as this person will have total control over your estate after you are gone. The person you select must be organized, responsible, and willing to put in the work. It is also a good idea to pick a backup just in case your first selection is not available. Make sure you speak with your first selection and backup to make certain they are willing to assume the role before moving forward.
Taking the above steps to protect you, your estate, and your family. They also provide peace of mind, as you can rest assured that you have a comprehensive plan in place.